Adamson Urges Kmart Employees to Tell What They Know

Kmart ceo James Adamson has sent an e-mail to employees of the bankrupt Troy, Mich.-based mass retailer, urging them to come forward with any information they have on the company's alleged improprieties, financial or otherwise.

Adamson asked that information be reported “through the proper channels,” a reference to the flurry of anonymous letters being sent by current and former Kmart employees directly to the Securities and Exchange Commission and to Kmart's auditors, lawyers and directors. According to The Wall Street Journal, Adamson said in his e-mail he was writing “to remind all associates of our Code of Conduct and the steps you can take if you want to share with the company on a confidential basis.”

The charges, which the S.E.C., FBI and the U.S. Attorney in Eastern Michigan are all investigating, claim that company deviated from standard accounting practices in the months prior to declaring bankruptcy; that its auditor PricewaterhouseCoopers knew about and ignored the practices; and that executives made misleading and deceptive public statements, contemplating bankruptcy as early as mid-2001 while it was assuring shareholders, employees and the investment community that the company was doing fine. The company has also been conducting its own internal investigation.

Adamson's e-mail urged employees to report suspected wrong-doings by talking to Kmart's divisional vp of audit services or chief compliance officer or calling a toll-free hotline number. Kmart is currently conducting mandatory training sessions for its employees about the company's ethics code.